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What is the difference between outsourcing development and outstaffing an IT employee for development?

In this article, we will understand what outsourcing and outstaff development are. There is a third option - the formation of an IT department, but it pulls on a separate cycle of publications, so I will omit this topic in this article.

Outsourcing is when you hire an IT team, a company, or a freelancer to solve your IT task, for example, to develop a mobile application designed to optimize the wholesale procurement process of your company.

Outstaffing is when an IT team or a company provides you with its employee(s) under your management, but without employment in your company's staff.

The main pros and cons of outsourcing

Positive:

1. An integrated approach to solving your problem. Both the client application will be created, and the server application will also be promoted.

2. No need to control the processes. The tasks are from you, the solution is from the performer, and everything in between is not your headache, but at the preparatory stage, you will still have to actively participate.

3. If someone leaves the development team, you will not have to look for a replacement, it falls on the shoulders of the outsourcing company/team.

Minuses:

1. Attention is distributed among all clients. If a company has 10 clients and one account manager, then communication will be scattered. Agree, it's hard to distribute attention to 10 clients at once.

2. It is unclear how the price is formed and what is embedded in it. Some performers are incredibly inflating their checks, and some cannot even soberly assess the cost of their services.

3. You cannot actively influence the development process. Most often, the outsourcer opposes you to get involved in his business processes, so you just have to receive reports on the work done and patiently wait for the result.

The main pros and cons of outstaffing

Positive:

1. Control over the activities of the contractor. The person comes at your complete disposal. The whole process from setting the task to controlling the execution is entrusted to you.

2. There is no need to worry about contributions to various funds. Removes accounting red tape from you. You pay the fee of an outstaff employee of the company that provided it.

3. There is no need to diligently check the competence of the employee. The guarantor, in this case, is the company that provides it.

Minuses:

1. Solving a limited number of tasks. You hire a person to solve a specific task, for example, to work on a section of a mobile application. He won't do anything else but that.

2. The complexity of integration into the workflow of your business. It is necessary to lay down time for adaptation and training in the use of internal systems of the enterprise.

There is another common disadvantage - most often companies and outstaff workers work for money, not for the idea of your product or business, so motivation and involvement may be low.

In which cases outsourcing is suitable, and in which outstaffing?

Outsourcing is optimal in most cases, especially when you start development from scratch and you don't have your own IT department.

Outstaffing is more suitable for cases when you already have your own IT department and you want to temporarily expand it to solve some task.

Conclusion

Before choosing a performer format for your IT solution, it is important to rationally evaluate your goals. For example, if you are opening a full-cycle IT company, then creating an IT department is suitable for you, if you need to create an MVP of a project, then outsourcing development is suitable, and if you already have a charged IT department or have a product in which you know what pool of tasks you need to perform, then it is suitable outstaffing.